Any type of business owner will consistently want to achieve growth, profitability and value in their business, but few actually know what needs to be done to make it happen!
To be successful and remain in business, both profitability and growth are important and necessary for a company to survive.
Profit, for any company, is the primary goal. After a company moves beyond the start-up phase, the next item of focus should be growth. Growth for a business is essentially expansion, making the company bigger, increasing its market and ultimately making the company more profitable.
Making your business more profitable involves looking at ways to increase sales revenue as well as decreasing your costs and benchmarking your business to see where you can save money. The following action items are critical to maximising growth, profitability as well as finding opportunities for your business:
Develop a Strategic Plan & Goal
A strategic plan is typically focused on mid to long-term goals and explains the basic strategies for achieving them. The purpose is to set overall goals for the business and to develop a plan to achieve them. It involves stepping back from the day-to-day operations and asking where the business is headed and what its priorities should be. As a starting point, ask yourself:
- Where is my business now?
- Where do I want to take it?
- What do I need to do to get there?
Build a plan that incorporates: internal drivers (SWOT Analysis); external drivers (Market structure, demand levels & cost pressures); a vision statement (Where you see your business in 5 to 10 years); top-level objectives (Major goals that need to be achieved); implementation (Setting out key actions); and resourcing (Financing requirements).
It is also important to note that these goals and plans MUST be communicated to everyone in the business. The purpose is to help the team understand the inevitable short and long-term trade-offs between growth and profitability.
Grow your Customer Base
Customer service is about giving customers what they want, when they want it, in the best possible way. If your business provides good customer service, you have a greater chance of keeping and increasing your customer base.
Research indicates that it costs up to 10 times as much to attract a new customer as it does to keep an existing one. You can establish a culture of excellent customer service in your business by planning, developing and sustaining a customer service program. Train your staff to give your customers the highest level of service.
Make Better Decisions through Data Analytics
Being able to make business decisions based on data is a competitive advantage. The key things to measure are: financial metrics such as revenue, cash, and assets; operational metrics such as inventory turnover and production levels; and sales and marketing metrics, including win rates and leads generated. These can help to:-
- Predict customer trends and behaviours
- Analyse, interpret and deliver data in meaningful ways
- Increase business productivity
- Drive effective decision-making
- Drive down costs
- Improve advertising
Take a Flexible Approach to Real Estate
The space a business occupies does a lot: It can enhance the brand and company image, attract talent, support growth, and help drive profitability. We are not just talking about where the office is located and how big it is, but also how business currently uses its space.
Consider what style of environment the employees need to work in – are they heads down and focused, or more collaborative and creative. Does the space accommodate these varied work styles? Building flexibility in the space itself can help to improve productivity, in turn improving profitability and growth of your clients staff.
Traditional work arrangements could be causing your client high turn over stats. Get the employees involved and ask how they like to work!
Provide the Proper Resources
Keep in mind that if you want growth – you cannot limit your expenses. You must make a consensus effort to invest in new ideas, new products, and new resources in order to maximize profit. It’s all about BALANCE! If you want profitability, you will still need to provide resources to maximize productivity and maintain enough growth to ensure that the company is moving forward and staying relevant by adapting to the changing market.
Author: Taylor Mann